DEXCOM INC Q4 FY2024 earnings call

• Revenue Growth: Fourth quarter organic revenue grew 8% compared to 2023, and full-year organic revenue growth was 12% in line with 2024 guidance.
• Customer Base: Ended 2024 with over 2.8 million global customers, a 25% increase from 2023.
• US Sales Force: Grew US prescriber base by over 50,000, improved sales force productivity, and expanded presence in primary care and emerging care points like maternal fetal medicine.
• Reimbursement: Broader CGM reimbursement globally; two of the three largest PBMs cover DexCom CGM for type 2 diabetes non-insulin users. Launched over-the-counter product Stella with over 140,000 users in the first four months.
• International Business: Secured basal coverage in France, strong demand in New Zealand, and ongoing efforts to expand global access.
• Product Advancements: Proprietary generative AI technology launched in Stella, partnership with Oura to integrate glucose data with vital signs, and progress on G7 fifteen-day system.

Worldwide revenue for the fourth quarter of 2024 was $1.11 billion, up from $1.03 billion in the fourth quarter of 2023, representing 8% growth. US revenue totaled $803 million, an increase of 4% from the prior year. International revenue grew 17% to $311 million, with international organic revenue growth at 19%. US contributed approximately 72.3% of the total revenue ($803M / $1.11B), while international contributed around 27.7% ($311M / $1.11B).

• 2025 Revenue: Anticipate total revenue of $4.6 billion, representing 14% growth for the year.
• Margin Expectations: Non-GAAP gross profit margin expected to be in the range of 64%-65%, non-GAAP operating profit margin ~21%, and adjusted EBITDA ~30%.
• G7 Fifteen-Day System: Expect second-half launch, which will drive gross margin leverage beyond 2025 as the installed base converts to the fifteen-day system.

• Supply Chain: Inventory issues due to shipping partner mishandling and production yield problems led to tight channel inventory management in the short term.
• Reimbursement: Uncertainties remain in fully securing coverage for all target populations, especially in non-insulin type 2 diabetes and international markets.
• Market Competition: Intense competition in the CGM market could impact market share and revenue growth.

Q: What is the status of the Salesforce and DME issues?

A: Made great progress; DME share has stabilized, and the sales force productivity has improved with the addition of over 50,000 prescribers.

Q: How is the volume vs revenue gap in the US expected to evolve?

A: Converging as rebate dynamics are lapped in 2025, expected to get closer to single digits by the end of the year.

Q: What is the status of the G7 fifteen-day system's FDA process?

A: Submitted for review, in the tail end of the review, and expected to launch in the second half of 2025.

Q: How is coverage expansion for type 2 non-insulin users impacting the business?

A: Coverage is in place, retention and utilization rates are high, and while utilization may decrease slightly, the economics per transaction remain similar.

Q: What is the timeline for the G8 product?

A: No specific timeline, with focus currently on the G7 fifteen-day launch first.